Termination of employment may be initiated in three ways: by fixed-end contract, by the employee or by the employer.
Where the dismissal is declared inadmissible, a payment with the following economics items must be set forth: an indemnification of 33 days of wages per year of service, with the periods of time consisting of less than one year pro-rated by months, up to a maximum of 24 months.
However, in case of collective layoff or redundancy for special economic, organisational, technical or productive reasons, the indemnity fixed by law is of 20 days of salary per year of service with a maximum of 12 months’ salary. Great care should be taken to ensure compliance with the relevant laws for the dismissal of an employee.
The foreign investor should be aware that the labour and Social Security laws in Spain are comparatively rigid. In common with other EU countries, Spain does not have the contractual flexibility in respect of labour contracts which exists in some non-EU countries.